Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
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eradicate many geography related challenges, but do not remove certain frictions as-
sociated with information shared by socially connected people (Agrawal et al., 2015). 
These social relationships independent of online tools continue to affect crowdfunding 
patterns. Additionally, the perception of trust connected individuals share cannot be 
easily overcome. Attitudes towards risk-taking are likely not globalized through 
crowdfunding. (Frydrych et al., 2014) 
Local and distant funders display different funding patterns, but this difference is 
mostly explained by the typically local nature of social relationships. Local funders, 
such as family and friends, often act as early funders. More distant funders then rely 
of the information revealed by early funders to make their funding decisions. These 
pattern differences are more associated with social networks, but have a geographical 
effect. (Agrawal et al., 2015) 
5.7. Other Crowdfunding Projects 
The success of crowdfunding initiatives can also be affected by the success or failure 
of other crowdfunding ventures. This is because funders are influenced by the perfor-
mance of similar initiatives in the past (Ward and Ramachandran, 2010). If other re-
lated projects have succeeded in their crowdfunding in the past, funders are more con-
fident of the potential success of the initiative at hand. Alternatively, if other similar 
projects have failed, funders are not as convinced of the initiative’s success. 
Success and failure of related projects also affect the creators of the current initiative. 
According to Gleasure (2015), entrepreneurs that have observed crowdfunding fail-
ures first-hand are most fearful of public failure. So entrepreneurs with higher expo-
sure to crowdfunding and failures within it are more worried about their own crowd-
funding. This might be because people exposed to crowdfunding are more aware of 
all the implications crowdfunding can have for an entrepreneur.